Chinese auto market evolves

11 April 2011

BEIJING: Automakers seeking to enhance their position in China could benefit from adapting media plans, determining precise strategies by the age, gender and location of consumers.

Volkswagen, MediaCom and Millward Brown joined forces to survey 6,682 people in 17 urban centres across the country.

Respondents had either bought a new car during the last two years or intended to do so in the coming 24 months.

The results showed the sustained economic growth and rising affluence experienced by Chinese shoppers have encouraged a "new set of expectations" manufacturers must consider.

"Their life choices - including which brand of car they drive or would like to drive - are becoming more varied," the report said.

"At the same time, the media landscape through which they receive their commercial messages and brand recommendations has become more complex, more fragmented and more social."

Indeed, digital channels now exert a major impact at all stages of the purchase funnel, from building awareness to "creating a positive disposition" and "setting their behaviour intent".

Levels of trust in official brand websites and specialist automotive portals match those boasted by state broadcaster CCTV, indicating high credibility ratings.

However, traditional media retains a vital status, both because TV boasts unparalleled penetration, especially in lower tier areas, and as radio has a unique role in providing traffic updates.

"Digital is not a solus medium and needs to be used in conjunction with other messages," the study said. "Other media are very well placed to reach key target groups."

The analysis divided the panel into four distinct categories offering clear opportunities for automakers.

The first, young drivers, is comprised of individuals aged between 20 and 30 years old, and made 27.6% of Chinese car purchases in 2010, a figure that climbed in Tier 1 cities like Shanghai and Beijing.

Online chat and social networking are among the primary media activities pursued by this community, who usually work long hours and thus employ "virtual tools" for various purposes.

"Every aspect of car brand communications such as brochures needs to be digitised for this audience," the study said.

Another core constituency is women, currently claiming over 25% of new registrations, suggesting a generation of confident, financially successful and independent female shoppers are in the ascendancy.

"Word of mouth is particularly important for women so bloggers and social media are crucial channels," the study said.

"Women also read auto magazines in a different way from men. They focus less on numbers, more on the images and prefer shorter articles."

Wealthy households offer equally substantial prospects for luxury marques, with radio and the mobile web integral to reaching this demographic.

"Car brands need a premium image to be considered but one key change has been the evolution of a significant group that have become wary about showing off," the report said.

Finally, Tier 2 cities are delivering a surge in demand, and as residents of these regions typically possess a more "relaxed lifestyle" and "conventional media diet", TV remains an essential medium here.

Paul Hu, head of Volkswagen brand marketing in China, said that consumers insights "help cut through the ever-growing clutter in the media environment."

"As the number one automobile company in China, Volkswagen needs the best possible understanding of automobile consumers," he added.

Data sourced from Mediacom; additional content by Warc staff